The chief executive of Barclays, CS Venkatakrishnan, has indicated that higher taxes on banks would be manageable for the lender, while acknowledging the complex considerations facing the UK government ahead of next week’s budget. Venkatakrishnan, known as Venkat, expressed support for Chancellor John Healey, describing him as “the man in the arena” entrusted with a significant public responsibility.

Venkat emphasized that any increase in taxation is a matter of proportion and market signals rather than a severe financial burden on Barclays. Despite previously opposing further tax hikes on banks, he recognized that the chancellor must balance multiple factors when formulating fiscal policy. Venkat underscored that the long-term goal shared by both government and industry is economic growth.

The banking sector has argued that it already carries a substantial tax load, paying both a corporation tax surcharge on profits and a balance sheet levy. UK Finance, the industry’s lobbying group, warned that additional tax increases could hinder lending activity, potentially reducing investment in the UK as international banks might pivot their funds elsewhere. According to UK Finance, the banking industry contributed nearly £48 billion in taxes in the year ending March, marking the highest total since the group began tracking these figures in 2014. The effective tax rate for a London-based lender was estimated at 46.2%, surpassing rates in other major financial hubs across the United States and Europe.

While the banking industry signals caution over further tax rises, some organizations advocate for increased levies on banks. The Trades Union Congress (TUC), among others, argues that sustained higher interest rates have boosted bank profits, making them viable targets for additional taxation. Barclays recently reported a 12% increase in quarterly profits to £2.3 billion, even as the bank announced plans to cut approximately 5,000 jobs.

Venkat reiterated that the government, headed by Healey, must weigh a variety of competing priorities in the upcoming budget. He conveyed confidence that the chancellor’s objectives align with those of the banking sector and the wider economy, focusing on fostering long-term growth.